Case -7.
Manohar
Infrastructure and Constructions Private Ltd v. Sanjeev Kumar Sharma & Ors.; Citation: LL 2021 SC 714]
Decided on December 2021
Legal Point
Whether NCDRC is within jurisdiction to order for deposit of entire
amount Determined by SCDRC for Stay
Facts
An order was passed by NCDRC against the Construction Company in appeal
to deposit entire amount determined By SCDRC while granting stay. Builder party
to dispute along with number of other builders including TDI against whom
similar cases were also going on with NCDRC protested against this order
stating 50% of decrial amount has already been deposited as per the provisions
of the Act
Supreme Court gave its verdict on two points;
1.
There is a mandatory provision in the
act to deposit 50% of decrial amount which had been followed by the Builders
and appeal had been accepted
2.
Construction Company requested for
stay on implementation of the order by state commission. National commission
looked into the facts and circumstances of the case and used its discretion to
impose a condition of depositing entire amount determined by state commission
in its order for granting stay.
Supreme Court held this was done
under the discretionary power vested with NC and it has to do nothing with
mandatory requirement of depositing 50% of determined amount by State Commission.
Construction Company cannot say that depositing 50% amount gives them write to
get stay
Supreme Court also referred to its earlier decided case wherein it was
held that courts can impose any condition to grant stay on implementation of
order from lower court
Case-8.
M/s Sheth M L Vaduwala Eye
Hospital Versus Oriental Insurance Company Limited and Others SC JUDGMENT
by J. Dr Dhananjaya Y Chandrachud, J. Dt 11 Dec 2021.,
Legal point
Whether insurance company is liable to indemnify hospital when hospital
not insured and insured doctors not made party
Facts
M/s Sheth M L Vaduwala Eye Hospital a charitable
hospital registered under the Bombay Public Trust Act 1961. Conducted an eye
camp where cataract surgeries were performed on 112 patients. Negligence was alleged
in the performance of the surgeries by the use of non-sterilized appliances,
contaminated medicines and lenses of an inferior quality resulting in eye
infections and loss of vision. The District Forum by its order dated 19
February 2010 awarded an amount of Rs. 1,70,000 as compensation to each of the
twenty-four complainants together with a refund of registration fees (Rs. 250),
compensation for mental agony (Rs 3000), costs (Rs 1500) and interest at the
rate of 9% per annum. State Government also found that there was negligence
The
NCDRC held that this fact could not by itself fasten the liability on the
insurer, particularly in the absence of any specific allegation of negligence
against any of the doctors who are actually insured the insurance policies were
obtained by the doctors. These were professional indemnity insurance policies
which would cover a claim for professional negligence which was made against
the doctors. State Commission confirms negligence, specifically against the
hospital which is not insured. In a medical Negligence case an
insurance policy taken by doctors for professional indemnity can’t be used
to make insurance Co pay the liability of compensation to patients on
behalf of the hospital.SC confirms the order of NCDRC and dismiss SLP filed by
hospital
Case-9.
M/S. Newtech Promoters And Developers Pvt. Ltd.Versus State Of Up &
Ors.
Civil Appeal No(S). 6753 Of 2021 (Arising Out Of SLP(Civil) No(S). 3426
Of 2021)
Judgment Dt 11 Nov 2021.
The common issues is
regarding certain provisions of The Real Estate (Regulation and Development)
Act, 2016(hereinafter being referred to as “the Act”), The Uttar Pradesh
Legal Point
1.
Whether the RERA Act 2016 is
retrospective or retroactive in its nature.
2.
Whether the authority has
jurisdiction to direct return/refund of the amount to the allottee under the
Act or the jurisdiction exclusively lies with the adjudicating officer under
Section 71 of the Act?
3.
Whether Section 81 of the Act
authorizes the authority to delegate its powers to a single member of the
authority to hear complaints instituted under Section 31 of the Act?
4.
Whether the authority has power to
issue recovery certificate for recovery of the principal amount under Section
40(1) of the Act?
Facts
·
The promoters failed to hand over
possession of a unit/plot/building in terms of the agreement and complaints
were instituted by the home buyers for refund of the investment made along with
interest. Order was passed by the single member of the authority
after hearing the parties with the direction to refund the principal amount
along with interest
·
The order passed by the authority is
appealable under Section 43(5) of the Act subject to compliance of predeposit
under Section 43(5) before the Appellate Tribunal. But the promoter/real estate
developers approached the High Court by filing a writ petition under Articles 226
and 227 of the Constitution questioning the order passed by the authority
holding it to be without jurisdiction it has been passed by a
single member of the authority having no jurisdiction to pass such orders of
refund of the amount as contemplated under Section 18 of the Act. They
also
challenged the condition of predeposit as envisaged under proviso to Section
43(5) of the Act
·
High Court of Allahabad
dismissed
their writ stating they have no jurisdiction, hence the present batch of appeals have been
preferred by the promoters
SC holds
Issue -1. Regarding the retroactive
application of the provisions of the Act 2016 with reference to the ongoing
projects ,Court held that the
Parliament in its wisdom after holding extensive deliberation on the subject
thought it necessary to have a central legislation in the paramount interest
for effective consumer protection, uniformity and standardisation of business
practices and transactions in the real estate sector, to ensure greater
accountability towards consumers and in view of the objective of the act
,ongoing projects are also brought under the provisions of the act
Issue -2 Jurisdiction of authority to direct return/refund of the amount to the
allottee under Sections 12, 14, 18 and 19 of the Act.
Refereed law In terms of Section 18 of the RERA Act, if a promoter fails to
complete or is unable to give possession of an apartment duly completed by the
date specified in the agreement, the promoter would be liable, on demand, to
return the amount received by him in respect of that apartment if the allottee who
wishes to withdraw from the Project.”. Referred case Imperia Structures Ltd. Vs. Anil
Patni and Another held that Section 18 confers an
unqualified right upon an allottee to get refund of the amount deposited with
the promoter and interest at the prescribed rate, if the promoter fails to
complete or is unable to give possession of an apartment as per the date
specified in the home buyer’s agreement
Issue-3 Regarding delegation
of power o single judge
Sec.29. (2)
If the Chairperson for any reason, is unable to attend a meeting of the
Authority, any other Member chosen by the Members present amongst themselves at
the meeting, shall preside at the meeting.
In the instant case, the authority by a special
order dated 5th December, 2018 has delegated its power to the single
member for disposal of complaints filed under Section 31 of the Act. So far as refund of the amount with interest
is concerned, it may not be considered strictly to be mechanical in process. If
power has been delegated by the authority, to be exercised by the single member
of the authority in exercise of its power under Section 81 of the Act that
cannot be said to be against the provisions of the Act.
Issue -4 whether the authority has the
power to issue recovery certificates for recovery of the principal amount under
Section 40(1) of the Act?
40 Recovery
of interest or penalty or compensation and enforcement of order, etc.—
(1)If
any adjudicating officer or the Regulatory Authority or the Appellate Tribunal,
as the case may be, issues any order or directs any person to do any act, or
refrain from doing any act, which it is empowered to do under this Act or the
rules or regulations made thereunder, then in case of failure by any person to
comply with such order or direction, the same shall be enforced, in such manner
as may be prescribed.”
The principal
sum with interest has become a composite amount to be recovered as arrears of
land revenue under Section 40(1) of the Act.
Supreme Court
finally settled all the issues related to real estate act in this case which is
landmark judgment of the year 2021
Case -10.
Union Bank of India vs. Rajasthan Real Estate Regulatory
HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR
D.B. Civil Writ Petition No.
13688/2021
Bench: Akil Kureshi, Uma Shanker Vyas
Decided on 14 December, 2021
Legal point
·
Whether RERA have any
jurisdiction over the bank as banks do not fall under the definition of
‘Promoters’ for the purpose of RERA Act.
·
Whether the RERA would prevail over
SARFAESI.
·
Whether the single member of RERA is
competent to hear and decide the complaints filed before the authority.
Facts
An under construction
residential complex project titled
‘Sunrisers’ building was mortgaged by the developer to Union Bank of India
(Erstwhile Andhra Bank), for obtaining a term loan of Rs. 15 crore, several
flats were already booked by the allottees even before the said term loan.
Due to non-repayment of
the said loan by the promoters, the entire project building was attached by the
Union Bank of India and initiated auction of the building to recover the loan amount.
Homebuyers contacted RERA Rajasthan & RERA in its judgment cancelled the
auctions proceedings of the bank and ordered the bank to hand over the
possession of the flat to RERA, which would get the project completed at its
own level.
The Union Bank of India
challenged the order by stating that the RERA does not have any jurisdiction
over the bank as banks do not fall under the definition of ‘Promoters’ for the
purpose of RERA Act. Bank is neither Promoter /agent of promoter nor a
homebuyer.
That the recovery
proceedings of the bank under special act SARFAESI meant to
recover their unpaid dues, cannot be halted by RERA
That the single member
of RERA is not competent to hear and decide the complaints filed before the
authority.
Order by H.C.
The divisional bench of
High Court of Rajasthan comprising Chief Justice Akil Kurashi and Justice Uma
Shankar Vyas decided the writ petitions filed by the Union Bank of India
against the order passed by Rajasthan RERA with the following observations -
That pursuant to taking
possession of the project, the bank enters into the shoes of the promoter and
becomes the assignee of the promoter and thus, amenable to jurisdiction of
RERA.
The rights of the allottees
are considered of paramount importance by court and it would confer wide powers
to RERA. The RERA would prevail over Securitisation
and Reconstruction of Financial Assets and Act, 2002 (hereinafter
to be referred as 'SARFAESI Act') the rights of the real
estate allottees shall not be subservient to that of Bank and cannot be
infringed by the bank while exercising its legal rights.
It was further held
that the single member of RERA is competent to hear and decide the complaints
filed before the authority.
This judgment by High
Court of Rajasthan is an outstanding consumer jurisprudence
Dr Prem Lata
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